Estate planning rules affected by recent Supreme Court ruling.

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Estate Planning on Aug 14, 2015.

With the recent Supreme Court case in which same-sex marriage rights were the central focus, a number of other legalities concerning gay couples were also affected. One of those areas involves estate planning. Same-sex couples in Pennsylvania and across the nation will now have the same rights as heterosexual couples when it comes to matters of inheritance and incapacitation planning.

One of the most significant aspects of the legitimizing of same-sex marriage involves the portability of one partner’s estate tax exclusion amount. Currently, that threshold sits at $5.43 million. Wealth accumulated beyond that point is subject to estate taxes. Prior to the recent Supreme Court case, same-sex partners were unable to take advantage of portability, which allows one spouse to retain any unused credit when his or her partner passes away. Now, however, same-sex partners will have full portability rights, which can greatly reduce the tax burden that the surviving spouse will eventually incur on his or her own estate.

Another benefit now afforded to same-sex couples who marry involves the ability to be assigned the role of conservator or guardian in the event that one’s partner becomes incapacitated. While having the status of “spouse” over that of “partner” does not necessarily mean that a court will grant those rights, it is certainly a more likely outcome now that same-sex marriage has been legitimized at the highest judicial level. That said, it is always a good idea to draft the proper paperwork to designate power of attorney, guardian and other such duties, regardless of an individual’s marital status.

For same-sex couples in Pennsylvania and elsewhere, the recent Supreme Court decision is viewed as a win. Having the right to the estate planning tools mentioned above is just one aspect of that victory, but one that can be very powerful for many families. For many couples, the change may prompt a re-evaluation of their current estate plan to ensure that the best possible protections are included.